Best Savings Account Rates 2010

If you are looking for a better place to park your hard earned cash, you will probably be disappointed when you see current savings account interest rates. Since I started tracking savings account rates early last year, the general trend is down, coming all the way from 4% APY to mostly below 2% in just one year. Right now, even 2% yield is hard to find. I mentioned yesterday that since now I have a large amount of cash, I’d love to get a little bit more return by putting the money in a short-term investment vehicle which basically just earns interest. Since I will need the money pretty soon, I can’t risk of losing any so that excludes the stock market. However, after looking around, I gave up that idea because it doesn’t look like I can get anything better than 1.60% APY, which is only slightly better than what I have now.

There is, however, one exception that I didn’t expect to actually become the leader. It is SmartyPig, which I first reviewed nearly two years ago shortly after it was launched. It wasn’t a traditional bank like others, but more link a social savings vehicle because not just you, the account owner, can contribute to your savings goal, but also your friends and/or family members (see my SmartyPig review for details about their service). With 2.01% APY, it beats other traditional bank savings account easily (SmartyPig is backed by a traditional bank, West Bank in Iowa). From what I can, if you can make $250 initial deposit and set aside at least $10 each month (regular transferring money to a high-yield savings account is a good habit anyway), then SmartyPig actually makes a good choice to receive a higher return for your money, though there are a few more restrictions than traditional savings accounts have.

In addition to SmartyPig, there are a few other options for your money is this tough economic environment (rated updated on March 1, 2010):

• EverBank Yield Pledge Money Market Account: 2.25% 3-month bonus rate. Current rate after the promotion period is 1.50% APY, making the first year yield 1.51% for balance up to $50,000. $1,500 minimum deposit required to open an account, but $5,000 minimum balance is needed to avoid $8.95 monthly fee.
• American Express High-Yield Savings Account: 1.30% APY with no minimum. No fee.
• Ally Bank Online Savings Account: 1.30% APY with no minimum. No fee.
• Capital One InterestPlus Savings Account: 1.25% APY + 10% bonus on interests. No minimum to open an account, but $2,500 is required to earn the APY. Bonus is credited every quarter for maintaining monthly balance at $15,000. No fee.
• Sallie Mae High-Yield Savings Account: 1.25% APY with no minimum. No fee.
• Discover Bank Savings Account: 1.35% APY, $500 minimum deposit.
• WTDirect Savings Account: 1.26% APY, $10,000 minimum deposit. No fee.
• FNBO Direct Savings Account: 1.25% APY with no minimum. No fee.

You can find more savings account deals here. BTW, I have removed a few banks from the list because they were either closed or merged with other banks in 2009. Among them, I have introduced Venture Bank Wise Choice Savings Account here before when they were offering very competitive rate. Now, it’s gone. This also highlights the risk of doing business with small banks when looking only at the interest rates, even though all the banks are FDIC insured.

Photo credit: tenaciousme